PUBLISHER: The Business Research Company | PRODUCT CODE: 1888069
PUBLISHER: The Business Research Company | PRODUCT CODE: 1888069
Artificial intelligence (AI) in aerospace and defense refers to the use of advanced machine learning algorithms, data analytics, and automation technologies to improve the efficiency, safety, and effectiveness of aerospace and defense operations. It involves AI systems performing tasks that traditionally require human intelligence, such as decision-making, threat detection, predictive maintenance, navigation, mission planning, and autonomous control.
The key offerings of artificial intelligence (AI) in the aerospace and defense market include hardware, software, and services. Hardware consists of the physical components and computing infrastructure that support AI-enabled systems, including processors, sensors, embedded systems, and edge devices designed for complex data processing and real-time analytics in mission-critical environments. Deployment types include cloud-based and on-premises solutions, implemented across multiple platforms such as land, naval, airborne, and space systems. Key technologies include machine learning, natural language processing (NLP), computer vision, context-aware computing, robotics, and big data analytics, which are applied in predictive maintenance, surveillance and monitoring, mission systems, cybersecurity, data analytics, autonomous systems, navigation and guidance systems, and other applications.
Note that the outlook for this market is being affected by rapid changes in trade relations and tariffs globally. The report will be updated prior to delivery to reflect the latest status, including revised forecasts and quantified impact analysis. The report's Recommendations and Conclusions sections will be updated to give strategies for entities dealing with the fast-moving international environment.
The sharp hike in U.S. tariffs and the associated trade disputes in spring 2025 are notably impacting the aerospace and defense sector by raising costs for titanium, carbon fiber composites, and avionics materials largely sourced from global suppliers. Defense contractors, locked into fixed-price government contracts, absorb these added costs, while commercial aerospace firms face airline pushback on higher aircraft prices. Delays in component shipments due to customs bottlenecks further disrupt tight production schedules for jets and satellites. The industry is responding by stockpiling critical materials, seeking waivers for defense-related imports, and collaborating with allied nations to diversify supply chain.
The artificial intelligence (AI) in the aerospace and defense market research report is one of a series of new reports from The Business Research Company that provides artificial intelligence (AI) in the aerospace and defense market statistics, including artificial intelligence (AI) in the aerospace and defense industry global market size, regional shares, competitors with a artificial intelligence (AI) in the aerospace and defense market share, detailed artificial intelligence (AI) in the aerospace and defense market segments, market trends and opportunities, and any further data you may need to thrive in the artificial intelligence (AI) in the aerospace and defense industry. This artificial intelligence (AI) in the aerospace and defense market research report delivers a complete perspective of everything you need, with an in-depth analysis of the current and future scenario of the industry.
The artificial intelligence (AI) in aerospace and defense market size has grown rapidly in recent years. It will grow from $25.69 billion in 2024 to $29.27 billion in 2025 at a compound annual growth rate (CAGR) of 14.0%. The growth in the historic period can be attributed to increasing defense budgets among major nations, rising geopolitical tensions and border conflicts, growing demand for efficient decision-making in complex missions, surge in commercial air traffic and fleet modernization, expansion of homeland security and surveillance operations, and rising investments in military modernization programs.
The artificial intelligence (AI) in aerospace and defense market size is expected to see rapid growth in the next few years. It will grow to $48.76 billion in 2029 at a compound annual growth rate (CAGR) of 13.6%. The growth in the forecast period can be attributed to increasing focus on autonomous defense operations, rising demand for predictive maintenance in aircraft fleets, growing adoption of data-driven decision systems in defense strategy, surge in public and private funding for aerospace modernization, expansion of national security initiatives emphasizing early threat detection, and rising need for enhanced operational efficiency and safety standards. Key trends in the forecast period include advancements in autonomous aerial systems, sensor fusion and situational awareness platforms, human-machine teaming and decision-support systems, smart maintenance and logistics optimization tools, intelligent defense simulation and training systems, and adaptive flight control and mission planning algorithms.
The rising defense expenditures are expected to drive the growth of the artificial intelligence (AI) in aerospace and defense market in the coming years. Defense spending is increasing primarily due to escalating geopolitical tensions, as nations enhance their military capabilities and invest heavily in advanced technologies to protect national interests amid regional and global conflicts. Higher defense expenditures support research, development, and deployment of AI technologies that improve efficiency, accuracy, and speed in aerospace and defense operations, resulting in stronger security, reduced human risk, and optimized resource use. For instance, in April 2024, the Stockholm International Peace Research Institute (SIPRI), a Sweden-based independent research organization, reported that world military expenditure rose for the ninth consecutive year in 2023, reaching $2,443 billion, a 6.8% increase from 2022. This illustrates how rising defense expenditures are fueling the growth of the AI in aerospace and defense market.
Key companies in the AI aerospace and defense market are focusing on integrating AI-powered design tools and simulations, such as embedded AI, to enhance situational awareness, operational efficiency, and real-time decision-making. Embedded AI integrates artificial intelligence algorithms directly into onboard hardware and electronic systems, enabling autonomous data processing and intelligent responses without reliance on cloud systems. For example, in June 2024, Safran Electronics and Defense, a France-based aerospace and defense systems provider, launched the Advanced Cognitive Engine (ACE), an embedded AI solution supporting defense platforms with real-time target detection, adaptive environmental analysis, and decision-support capabilities. This technology improves mission effectiveness, automation, and operator performance across land, air, and naval applications.
In September 2024, Safran S.A., a France-based provider of high-technology systems for aviation, defense, and space, acquired Preligens for $254 million (€220 million). This acquisition gives Safran access to Preligens' advanced AI analytics platform, capable of processing high-resolution imagery, full-motion video, and acoustic signals. The move strengthens Safran's AI-driven surveillance, reconnaissance, and decision-support capabilities while accelerating digital transformation and improving operational efficiency in aerospace and defense. Preligens S.A.S. is a France-based provider of AI solutions for aerospace, defense, and government applications.
Major players in the artificial intelligence (AI) in aerospace and defense market are Microsoft Corporation, Airbus SE, Raytheon Technologies Corporation, Lockheed Martin Corporation, International Business Machines Corporation, Intel Corporation, General Dynamics Corporation, Northrop Grumman Corporation, Honeywell International Inc., General Electric Co., Anduril Industries Inc., BAE Systems plc, NVIDIA Corporation, Thales Group, Leonardo S.p.A., Indra Sistemas SA, Palantir Technologies Inc., Helsing GmbH, Rebellion Defense, and Shield AI.
North America was the largest region in the artificial intelligence (AI) in aerospace and defense market in 2024. The regions covered in artificial intelligence (AI) in aerospace and defense report are Asia-Pacific, Western Europe, Eastern Europe, North America, South America, Middle East and Africa.
The countries covered in the artificial intelligence (AI) in aerospace and defense market report are Australia, Brazil, China, France, Germany, India, Indonesia, Japan, Russia, South Korea, UK, USA, Canada, Italy, Spain.
The artificial intelligence (AI) in aerospace and defense market consists of revenues earned by entities by providing services such as system integration, training and simulation, consulting, managed services, technical support, and modernization services. The market value includes the value of related goods sold by the service provider or included within the service offering. The artificial intelligence (AI) in aerospace and defense market also includes sales of autonomous drones, intelligent sensors, avionics modules, radar detectors, navigation controllers, and surveillance cameras. Values in this market are 'factory gate' values, that is the value of goods sold by the manufacturers or creators of the goods, whether to other entities (including downstream manufacturers, wholesalers, distributors and retailers) or directly to end customers. The value of goods in this market includes related services sold by the creators of the goods.
The market value is defined as the revenues that enterprises gain from the sale of goods and/or services within the specified market and geography through sales, grants, or donations in terms of the currency (in USD unless otherwise specified).
The revenues for a specified geography are consumption values that are revenues generated by organizations in the specified geography within the market, irrespective of where they are produced. It does not include revenues from resales along the supply chain, either further along the supply chain or as part of other products.
Artificial Intelligence (AI) In Aerospace And Defense Global Market Report 2025 from The Business Research Company provides strategists, marketers and senior management with the critical information they need to assess the market.
This report focuses on artificial intelligence (ai) in aerospace and defense market which is experiencing strong growth. The report gives a guide to the trends which will be shaping the market over the next ten years and beyond.
Where is the largest and fastest growing market for artificial intelligence (ai) in aerospace and defense ? How does the market relate to the overall economy, demography and other similar markets? What forces will shape the market going forward, including technological disruption, regulatory shifts, and changing consumer preferences? The artificial intelligence (ai) in aerospace and defense market global report from the Business Research Company answers all these questions and many more.
The report covers market characteristics, size and growth, segmentation, regional and country breakdowns, competitive landscape, market shares, trends and strategies for this market. It traces the market's historic and forecast market growth by geography.
The forecasts are made after considering the major factors currently impacting the market. These include the technological advancements such as AI and automation, Russia-Ukraine war, trade tariffs (government-imposed import/export duties), elevated inflation and interest rates.